It is a tragic tale of intrigue and espionage stretching from the Middle East to Melbourne, but new light has now been shed on what may have led to the death of Prisoner X.

Tuesday's Foreign Correspondent investigation prised open the case of Prisoner X, a man now understood to be an agent of Mossad - Israel's notorious intelligence agency - and who was also an Australian.

Ben Zygier, 34, allegedly killed himself in a top secret, supposedly suicide-proof Israeli prison cell in 2010. He was accused of espionage and treason.

There are now claims his arrest may have had something to do with the assassination of a top Hamas official in 2010 and the Australian passport scandal in the same year.

Doubts have also been cast over whether he took his own life.

Read Trevor Bormann's original story here

Watch the full Foreign Correspondent report on Prisoner X on iview

One of his Israeli lawyers who met him just days before his death says he gave no indication he was going to commit suicide.

"When I saw him, there was nothing to indicate he was going to commit suicide," said Avigdor Feldman, a top human rights lawyer.

In an interview with Israel's army radio, Mr Feldman said he had met Prisoner X to offer him advice ahead of his trial.

"His family asked that I meet him to advise him. The trial hadn't properly started yet," he said, indicating the prisoner had already been indicted and that talks were under way with senior prosecutors to reach a plea bargain.

"He asked for advice and I sat and listened to him. Not that I'm a psychologist, but he appeared rational, focused, he spoke clearly about the issue and didn't exude any sense of self-pity."

A day or two later, Mr Feldman's liaison at the prison rang him to say the prisoner had died.

The lawyer admitted he was surprised "that a man who was being held in a cell like that, a cell which was being monitored and checked 24-hours a day, could manage to commit suicide by hanging himself."

Mr Feldman, who said he knew the prisoner's real name and had access to the file on his arrest but was unable to give any details for legal reasons, said it was clear the detainee was facing a very long jail term.

"I understood that he was told he was likely to face the longest possible jail term and that he was likely to be ostracised by his family," he said.

He would be the last person on earth that I would guess would take his own life, especially being in a high security prison where there's nothing to hang from.
Henry Greener

Back in Melbourne, Zygier family friend Henry Greener also doubts the official suicide story.

"He had everything to live for and that's why the death being noted as suicide comes as a great surprise to us all," he said.

"He would be the last person on earth that I would guess would take his own life, especially being in a high security prison where there's nothing to hang from."

Mr Zygier came from a prominent Jewish family in Melbourne.

In the 1990s he studied law at Monash University, before moving to Israel in his 20s, where he did military service and married.

After several years, he returned to Melbourne and went back to Monash to study an MBA.

By then, reports say he was already working for Mossad.

Mr Greener, who presents a Jewish program on Melbourne community television and has known the Zygier family since before Ben was born, says Ben had a good family life.

"He matured beautifully, he was very happy, he was in a relationship and married and having children," he said.

"He seemed to be really happy living in Israel, loved living there. He had a social conscience and for him it was important to be living there because there are so many social issues in Israel."
gfxb_BenZygierRedeux_1202_0.jpg Photo: What went wrong? Australian man Ben Zygier.

But Mr Greener says neither he, nor the Zygier family, know what what happened in 2010.

"We didn't know anything about what happened to him except there were whispers about him being in Mossad and whispers about detention and something went horribly wrong," he said.

From his home in Seattle, author and blogger Richard Silverstein has been following the case.

"My understanding of what he was doing in Australia was he was going back a couple of times and getting new passports and different identities that they could use for other Mossad operations, he registered in an MBA at the Monash campus and he was seen with Saudi students and Iranian students so he might've been doing recruitment on campus," he said.

January 2010 was a delicate time for Mossad and for Australia-Israeli relations.

Australian passports had been used by Mossad agents sent to assassinate Mahmoud Al-Mabouh, a senior Hamas official, in Dubai.

Soon after - connected or not - Mr Zygier found himself in prison.

Mr Silverstein says Mr Zygier may have been caught up in the assassination operation.

"It's entirely possible he was involved in this operation in some capacity, it's also possible that the assassination itself may have turned him away from what Mossad was doing," he said.

"You can't really rule anything out."

Mr Greener agrees something went horribly wrong.

"Beginning of 2010, where there is the passport issue, the Dubai assassination that occurred and apparently Ben was put under suspicion as one of the people who might've been involved in that whole affair," he said.

Back in Canberra it seems Australian spies were watching.

ASIO had reportedly been investigating three Australian-Israeli citizens suspected of spying.

It was through ASIO that news of the jailing of Mr Zygier first reached Australian diplomats.

Since Tuesday's Foreign Correspondent report aired, Foreign Affairs Minister Bob Carr has sent mixed messages, first saying Australia knew nothing about the prisoner before his death.

But today it was revealed diplomats did know about his detention in February 2010, 10 months before the Australian killed himself in prison.

"When information is received through intelligence channels then obviously it doesn't find its way into your normal consular filing system and so when we were checking our consular files there was not that relevant information, we've since pieced more of it together," DFAT secretary Peter Varghese said.
'Crisis of conscience'
Video: Journalist Jason Koutsoukis on his dealings with Ben Zygier shortly before his arrest (Lateline)

So what did this young Australian do that landed him in a high security Israeli prison?

Reports from the region suggest he was facing serious charges of espionage of helping Israel's enemies.

Mr Silverstein says there are several possibilities.

"If this was a betrayal of the state for financial reasons in which he was turned by another country's security intelligence services and went to work for another country for financial reasons or whatever reasons," he said.

"The other possibility which I'm more inclined to is there might've been a crisis of conscience of some kind, he might've been involved in activities he found repellent and he might've wanted to get out of the situation or blow the whistle on whatever he was engaged in."

Mr Greener has a similar theory.

"I think it was a very personal thing where Ben did something, it wasn't very well received by his superiors, he went into jail for it and unfortunately he didn't come out alive," he said.

In Israel, the Australian's detention and death have had virtually no coverage until now.

The government's gag order has been partially lifted.

An Israeli court statement sheds some light on the case, but not much.

"The inmate was registered under a false identity for security reasons, but his family was notified immediately upon his arrest," the statement reads.

"The president has submitted the case to the state prosecutor's office to examine aspects of negligence."

Mr Zygier's secret incarceration and death have also created a political uproar in Israel.

"Obscure prisoners kill themselves, no one knows about their existence. How is this on a par with a proper democracy, with a proper rule of law?" Israeli MP Zehava Galon has asked.

Three years since the saga began, the mystery of the young man's death is slowly unravelling for those who were close to him.

"Everybody loved Ben, he was considered to be a top boy, he always was," Mr Greener said.